Several FOMC members split on whether price gains remain too high
WASHINGTON — Federal Reserve Governor Christopher Waller said Thursday that next week’s August inflation report will largely determine whether he backs an interest rate hike at the central bank’s upcoming meeting later this month.
The government is scheduled to release the August inflation figures on September 11. If that report shows inflation continues to cool, Waller said he would be willing to keep the Fed’s benchmark interest rate unchanged. But he indicated he is prepared to move in the other direction if the data come in above expectations.
“But if inflation comes in hot, I would consider a rate hike,” Waller said in remarks reported by The Associated Press.
Waller framed current borrowing costs as only marginally restrictive on economic activity. He said rates are “slightly restricting” consumer and business demand, adding that “it may not take much acceleration in inflation to nudge me into supporting” a rate hike.
The remarks carry added significance because Waller sits on the Fed’s Board of Governors, a seven-member body in Washington, and is described by the wire service as an outspoken voice whose remarks carry particular weight for the upcoming inflation data.
Waller’s comments add to the weight already placed on the September 11 release by other members of the Fed’s rate-setting committee. Several committee members have voiced concerns that price increases remain too high, suggesting a rate hike may be needed. Yet others have said inflation is slowly cooling and that higher borrowing costs are not needed.
The committee’s divisions leave the Fed’s upcoming meeting closely tied to the September 11 data, with Waller’s conditional remarks placing his support for either action on the report’s contents.